All Forum Posts by: Troy Pickens

Locking the rate at 5% was the plan, I received the loan documents yesterday with the 5% on them yesterday and before I could get it signed and locked in, they called me and told me the rate was going to change to 6.5% and the 5% wasn't valid. I've talked to other lenders and the 6.5% with 0 points doesn't seem unreasonable for my situation. I guess the issue is that my mortgage company didn't provide an accurate initial rate, reran the numbers yesterday and realized they were way low at this point. 

Thanks for the responses.

I have a property under contract and was planning on signing the mortgage paperwork yesterday. I received the disclosures in the morning with a stated 30 year fixed 5.0% interest rate (0 points) for a $70,000 SFR investment property with 20% down. I then got a call from the mortgage company in the afternoon telling me that mortgage rates were skyrocketing and my new rate with 0 points would be 6.5% and I need to lock or it could increase even more.

A 1.5% increase on mortgage rates in a day seems crazy to me. Has anyone else experienced this or does anyone have knowledge of what happened with mortgage rates yesterday? 

Thanks!

Troy

Thanks for the response Michael! We have been able to walk through all the units so we have an idea of the condition. Hopefully an inspection will tell us everything about the more concerning issues. Talking to the tenants would be a good idea. We are leaning towards making a lower offer and at least getting to the inspection. Thanks for the thoughts!

I am just getting started in real estate investing and was hoping to get some more experienced opinions on a potential first deal. I have been learning everything I can from this site over the last few months and this property seems to be a good opportunity. I would love to hear any feedback you have to offer!

Property Info: 

Triplex in Oklahoma - (Duplex with additional house on back of property - all units 2 bed, 1 bath.)

Listing Price: $72,000                    Built: 1930                 

What I like: 

Current Rent - Property has previously rented for $500 for duplex units and $550 for back house. The duplex units are both currently occupied with leases through August and October 2018, back house is vacant. Based on analysis, we should be able to cash flow with the current two tenants in place ($1,000/month). 

Potential for Improvement - This property is not in the best area of town, however the street it is on is really nice for the area with many newer houses (2005 or newer). The property is in pretty rough shape, but there is a lot of potential with this property. Our current plan would be to purchase the property, and put some money into fixing the back house before renting in out (estimating $10,000). Assuming the current tenants continued to pay rent and there weren't any major issues, we would let them remain for the lease term and beyond. When they left or we decided to make a change, we would fix up the duplex units and rent them out at higher rates (most 2 bedrooms in the area rent for $600+)

What concerns me: 

Tenants - We don't have much background info on the tenants. We know that they are up to date on rent payments, but I'm concerned what we could be getting into. 

Condition of Property - The property is not in great shape. Everything cosmetic would need to be redone, I'm not too worried about this, just an expense to consider. I'm more concerned about any major structural issues that may come up. We don't have info on when the roof was replaced but there is no major visible damage. The disclosures say that foundation repairs were made in 2016 under one of the duplex units, so I'm hoping they inspected the rest and took care of major issues then. 

First Deal - The first is always the scariest... right? 

Right now we are thinking we will make an offer and if it is accepted, at least get an inspection and see if there are any major concerns at that point.

Would love to hear peoples thoughts on this. Any input would be appreciated!

Thanks,

Troy Pickens